Pat McCrory’s North Carolina Bathroom Law Impacts Employers

Pat McCrory's North Carolina Bathroom Law Impacts Employers

On March 24, 2016, North Carolina Governor, Pat McCrory, signed House Bill 2, entitled “An Act to Provide for Single-Sex Multiple Occupancy Bathroom and Changing Facilities in Schools and Public Agencies and to Create Statewide Consistency in Regulation of Employment and Public Accommodations” (HB-2) into law and it takes effect immediately.   In addition to curtailing the authority of local governments to enact anti-discrimination ordinances, HB-2 also expresses in no uncertain terms, that it is the State’s position that the protected class of “sex” under state law refers to a person’s “biological sex,” and HB-2 requires governmental entities (schools, universities, and other governmental agencies, boards, and departments) to designate “multiple-occupancy bathrooms and changing facilities” for use by people based on their “biological sex.”

Download our free white paper Top 10 Mistakes Employers Make and avoid costly mistakes

What precipitated HB-2?

Early this year, the City of Charlotte, North Carolina amended its non-discrimination ordinances to, among other things, add sexual orientation, gender expression and gender identity to the list of characteristics protected under local law. Based on these changes, transgender individuals were allowed to use the restroom of the gender with which they identify with, rather than their biological gender.

North Carolina’s General Assembly acted quickly to introduce HB-2 which was passed during a special session on March 23, 2016.  Governor McCrory signed it the next day.

What does HB-2 require?

The law requires all government entities to designate single-sex multiple-occupancy bathrooms and changing facilities” for use by people based on their “biological sex.”  The law defines “biological sex” as “the physical condition of being male or female, which is stated on a person’s birth certificate.” The law defines “multiple occupancy bathroom or changing facility” as “a facility designed or designated to be used by more than one person at a time where students may be in various states of undress in the presence of other persons. A multiple occupancy bathroom or changing facility may include, but is not limited to, a school restroom, locker room, changing room, or shower room.”  The law defines a “single occupancy bathroom or changing facility” as “a facility designed or designated to be used by only one person at a time where students may be in various states of undress. A single occupancy bathroom or changing facility may include, but is not limited to, a single stall restroom designated as unisex or for use based on biological sex.”

The mandate to provide single-sex multiple-occupancy bathrooms and changing facilities under HB-2 does not apply to private sector employers or local governments acting in relation to their own employees.  Therefore, private companies in North Carolina are still free to implement their own policies permitting transgender employees or customers to use restrooms that correspond to their gender identity or expression.

Can local governments still enforce their own anti-discrimination ordinances?

No – not as they relate to anti-discrimination ordinances that affect the public’s use of governmental facilities (or public accommodations). Section 3.3 of HB-2 [adding N.C. General Statute § 143-422.11, entitled the “Equal Access to Public Accommodations Act”] expressly provides as follows:

  • It is the public policy of this State to protect and safeguard the right and opportunity of all individuals within the State to enjoy fully and equally the goods, services, facilities, privileges, advantages, and accommodations of places of public accommodation free of discrimination because of race, religion, color, national origin, or biological sex, provided that designating multiple or single occupancy bathrooms or changing facilities according to biological sex, as defined in G.S. 143-760(a)(1), (3), and (5), shall not be deemed to constitute discrimination.
  • The General Assembly declares that the regulation of discriminatory practices in places of public accommodation is properly an issue of general, statewide concern, such that this Article and other applicable provisions of the General Statutes supersede and preempt any ordinance, regulation, resolution, or policy adopted or imposed by a unit of local government or other political subdivision of the State that regulates or imposes any requirement pertaining to the regulation of discriminatory practices in places of public accommodation.

A strict reading of Section 3.3 of HB-2 (addressing N.C. General Stat. section 143-422.11(b)), appears to indicate that local governments have absolutely no authority to enact local anti-discrimination laws relating to the provision of services to the public. Thus, the ordinance adopted by the City of Charlotte which would allow transgender individuals to use the public restroom of the gender they identify with, is superseded and preempted.

What rights do employees have to file a discrimination claim under North Carolina law?

Under N.C. Gen. Stat. Section 143-422.2 (the “Equal Employment Practices Act,”) it is the public policy of North Carolina to protect and safeguard the right and opportunity of all persons to seek, obtain and hold employment without discrimination or abridgement on account of race, religion, color, national origin, age, biological sex or handicap by employers which regularly employ 15 or more employees. Prior to the passage of HB-2, courts in North Carolina recognized a public policy employment discrimination (e.g. wrongful termination) claim premised on a violation of the Equal Employment Practices Act in addition to any discrimination claim under federal law.

However, HB-2 states expressly that the law “…does not create, and shall not be construed to create or support, a statutory or common law private right of action, and no person may bring any civil action based upon the public policy expressed herein.”  Instead, the North Carolina Human Relations Commission is authorized to receive charges of discrimination from the federal Equal Employment Opportunity Commission and is responsible for investigating such charges and trying, in good faith, to reach an amicable resolution of the charge. Based on the express language in HB-2, it now appears that employees in North Carolina can only bring such public policy employment discrimination claims under federal law.

What should private North Carolina employers be mindful of?

As stated above, since HB-2 does not mandate that private employers in North Carolina provide a single-sex multiple-occupancy bathroom or changing facility, they can permit employees to use the bathroom or facility of the gender they identify with.  Any private employer who is considering following the mandate in HB-2 voluntarily should be careful and seek legal counsel to ensure that the employer does not run afoul of any federal laws that may govern in the situation.

Also, while HB-2 expressly provides that employees do not have a private right of action against their employer for a statutory or common law discrimination claim under North Carolina’s Equal Employment Practices Act, employers should remember that many other statutes, including but not limited to, Title VII of the 1964 Civil Rights Act, as amended; the Americans with Disabilities Act, as amended; and the Age Discrimination in Employment Act, provide employees with protections against discrimination and all provide for a private right of action by the employee.

Contributor:  Lizbeth V. West, Attorney at Law | Weintraub Tobin